To understand fully what Revenue Recovery Specialists does, one needs to understand the background and business models of Online Travel Agencies (OTA’s) and realize the impact they have had on the hotel and travel industry.
In 1996 Microsoft, recognizing a great revenue opportunity in the travel industry, created a new company called Expedia.com. The purpose of this company was to access unused airline and hotel inventory through the worldwide web by connecting it to the Global Distribution System (GDS). This worked wonderfully as hotels offered "excess inventory" for sale albeit at a deeply discounted price. The proposition was that an unsold airline seat or hotel room was a perishable product. If it remains unsold today, it cannot be resold the next day. Hotels embraced the idea of providing unused inventory to Online Travel Agencies.
Expedia.com created a model that required a hotel room to not only be discounted, at the same time commissionable at 30% to 40%.Hotels embraced the concept seeing this as a new revenue source with little to no additional acquisition cost. Expedia.com grew and many more Online Travel Agencies soon followed. In 1997 another Online Travel Agency, Priceline.com created a similar company under the concept “name your own price” tool, again accessing the worldwide web and the Global Distribution System.
Many other Online Travel Agencies were birthed hoping to ride the wave of technology and access the worldwide markets and earn revenue from previously inaccessible markets. Over time Online Travel Agencies captured larger pieces of the travel market as consumers embraced the new concept of booking travel on line and grew to trust these companies. This created a colossal paradigm shift in the way travel is now booked.
Advancements in technology continued rapidly and travel was revolutionized. Online Travel Agencies grew rapidly and instead of selling “excess and limited inventory,” airlines and hotels gave them more inventory to sell. Over time, Online Travel Agency business became the primary source of business for many hotels, especially during low occupancy periods.
Through consolidation, both The Expedia Group and The Booking Holdings Group (Priceline) now dominate the Online Travel Agency industry. Through Expedia.com and Priceline.com, each company contracts with approximately 900,000 hotel type properties, Bread & Breakfast, condominium and time-share properties. In addition, they contract with more than 550 airlines and hundreds of car rental companies. Expedia.com and Priceline.com each employ about 22,000 people. Expedia.com and Priceline.com have strong positions in the world’s largest industry and continue to grow aggressively. They both have a lot of clout!